RBA’s Masterly Inaction Doubted in Easing Bets: Australia Credit
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Reserve Bank of Australia chief Glenn Stevens said last week that markets find the idea of his board’s “masterly inaction” unappealing. On cue, traders raised bets on lower interest rates.
After Stevens spoke on July 3, 30-day interbank futures showed about a 56 percent chance that policy makers will lower the benchmark rate by a quarter-percentage point by March, compared with 30 percent the day before. The extra yield on Australia’s 10-year note over similar-maturity U.S. Treasuries slid to 90 basis points last week, the least since October 2006.